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En Espanol...
Press
Release Contact:
November 16, 2000
Rob Schneider
(512) 477-4431, ext. 116;
or Rafael Ayuso, ext. 114;
Consumers
Union's Southwest Regional Office
Gail Hillebrand
(415) 431-6747
Consumers
Union's West Coast Regional Office
AUSTIN, TX - American retailers are hoping a
strong economy and increased Internet shopping will lead to a
respectable holiday shopping season in 2000, although analysts
predict other factors may conspire to keep sales from matching last
year's record pace.
Among the factors cited are rising fuel prices,
a volatile stock market and a recent retail slowdown. However, retail
analysts also expect to achieve dramatic gains in "E-tailing," or
Internet sales.
Whatever your shopping style, it is important
to plan ahead and watch your spending carefully, advises Consumers
Union, publisher of Consumer Reports. "Staying on budget and
resisting the urge to buy impulsively is one of the best gifts you
can give your loved ones this holiday season," says Rob Schneider, a
senior staff attorney with CU's Southwest Regional Office.
"Discipline in spending is the key to not
having a hangover when the 2000 holiday party's over," Schneider
adds.
While crowded shopping malls are still a fact
of life, some 25 million shoppers somewhat eased the problem last
year by venturing into cyberspace during the holiday season. Industry
experts predict that about six million Internet users will make their
first online purchase in 2000.
According to BizRate.com, online sales are
expected to double this year, as more and more consumers opt to shop
from the comfort of home rather than brave the uncontrolled masses at
the shopping malls.
"With the growing number of choices available
to consumers this holiday season, the number of people who enter 2001
wondering how their debt balances got so out of control will also
inevitably grow," says Schneider. "More than ever, it is important
for consumers to know how to protect themselves."
Here are some tips from Consumers Union to ease
you through the holiday shopping season:
· SET A BUDGET AND STICK TO IT. The urge to buy on impulse during the holidays can be detrimental to your pocketbook. The best gifts are not necessarily the most expensive. A little creativity on your part can go a long way.
· ASSESS SPENDING HABITS. The best method of paying really depends on how you spend money. If you tend to splurge more when you use a credit card, perhaps cash, check or debit is a more viable option to keep you on track.
· PAYING WITH CASH OR CHECKS. Don't send cash in the mail, and don't pay in cash when a product still has to be delivered to you. Cash does have some advantages, such as keeping you off of unsolicited mail lists and enabling you to pay in full for an item before you leave a store, however checks also enable you to pay in full without the added risks of carrying cash. When using a check, make sure that you have the money in your account to cover it. Bounced check fees to the store and bank can total $50, so carefully monitor your account. It is also possible to stop payment on a check if you have a dispute with a merchant, so long as you act quickly.
· DEBIT CARDS. A debit card is good if you don't like to carry cash or write checks. But, carrying an offline debit card is like carrying a checkbook full of signed checks. Take extra caution with a debit card. Purchases made with a debit card come directly out of your account, and once you make the purchase, you cannot stop payment the way that you can with a check.
Issuers of debit cards have put liability caps on lost or stolen cards from zero to $50, depending on when you report the card missing. Whoever is in possession of your card can make purchases up to the purchase limit, or up to the amount that you have in your account plus any overdraft protection, as most retailers don't require the use of your PIN number. You will have to work with your bank to get your money back. If your card is lost or stolen, report it immediately by phone, then notify the issuer in writing. Keep receipts and compare them with your bank statements, and immediately report any discrepancies.
· CREDIT CARDS. Credit cards can be very useful, especially for items that have to be delivered or that might break down. However, it is much easier to splurge when it comes to credit cards, so try to restrict purchases to what you can pay when the bill arrives.
With a credit card, you also have more leverage to return a product than you would if you were to pay with a credit card or cash. The Fair Credit Billing Act gives you the right to defend against payment of a credit card charge if you show that the merchant failed to resolve a problem with the goods or services satisfactorily. This rule applies only if the item cost more than $50 and you bought it in your state, within 100 miles of your state or from the credit card issuer.
Stay away from store credit cards if you can't pay the bill in full every month. Store credit cards tend to have higher interest rates than bank-issued credit cards, which most retailers accept. Also, stay away from credit card advances. This can be a costly way to borrow money. There is a fee, which is generally 2 to 4 percent of the total cost of money borrowed, and often, the interest rates on the borrowed money are higher than rates on regular credit purchases.
· HOME EQUITY LOANS. Don't use these to pay your holiday bills or credit card debts. Taking a home equity loan to consolidate your debts could worsen your financial problems. If you can't pay back the loan, you could lose your house. Rather, use these loans for specific, planned expenditures, such as school tuition or home improvements.
According to Jupiter Media Metrix Inc., an
Internet research firm, online sales in the November-December holiday
shopping months will jump 66 percent from 1999 to $11.6 billion. With
more than 6 million Internet users expected to make their first
online purchases this holiday season and industry analysts predicting
that online sales will more than double last year sales, it is
essential to know the do's and don'ts of online holiday shopping.
· BUY EARLY. The two largest customer complaints last year were late delivery of products and stock shortages. According to BizRate.com, one in four online orders were delivered late during the 1999 holiday shopping season. E-tailers this season have more of an idea of what to expect during the holiday rush, and most major Web sites now offer live online or call-in customer service - or both, in addition to extras such as online order tracking and gift wrapping. The peak buying day for online shopping is December 14, so getting your order in early will help ensure that you don't encounter problems.
· CHECK OUT CONSUMER REPORTS' E-RATINGS OR BIZRATE.COM'S SHOPPER EXPERIENCE RATINGS BEFORE MAKING A PURCHASE. Consumer Reports' online e-Ratings provide current assessments of a variety of online shopping sites. Online subscribers to Consumer Reports can check the e-ratings at www.consumerreports.org to see how a retail site scores on buyer-friendly criteria such as return policies, shipping procedures and easy site navigation. Another site that provides e-tailer ratings is www.BizRate.com, an independent and unbiased organization, which conducts surveys of millions of online shoppers every month on a variety of related issues to come up with its' "shopper experience" ratings.
· DOUBLE CHECK PRICING AND TRUST YOUR INSTINCTS. If a deal seems too good to be true, it most likely is. Comparison-shop both online and off to make sure that you are getting the best deal for your money, particularly if you are bidding in an online auction.
· MAKE SURE THAT YOUR PERSONAL INFORMATION IS SECURE. Consumer Reports ranks E-tailers' privacy policies in addition to other criteria in its online e-Ratings. Consumers Union also recommends carefully reading a retailer's online privacy policy to ensure that your personal information will not be shared or sold to other marketers.
· PAY WITH A CREDIT CARD. Under federal law, your liability for unauthorized credit card charges is limited to $50. In fact, some credit card issuers and web site operators say that under certain circumstances they will even cover this amount. The level of protection with credit cards is also better than other forms of payment such as debit cards, cash on delivery, certified checks and money orders.
· KEEP ALL RECORDS OF ONLINE TRANSACTIONS. This includes printouts of:
· Web pages indicating the seller's name, phone number and address.
· Web pages with a description of your orders.
· Legal terms from the Web site.
· Any correspondence with the seller, including confirmation messages and notes in which you notify the seller of defects and responses.
RETURNS
Save all receipts and proofs of purchase. If a
purchase doesn't work as advertised, promptly take it back and ask
for a refund or replacement. If you are still dissatisfied, contact
the seller and manufacturer in writing. Be persistent in pursuing
your complaint. If you are not satisfied, complain in writing to the
local District Attorney's office or consumer affairs office.
For online returns, check out the retailer's
policy before buying. Return shipping costs can be expensive, and
some retailers will charge a re-stocking fee on returned products.
However, many chain retailers will allow you to return or exchange
purchases made online to a local store, provided that you bring the
accompanying receipt. Many others will pay shipping costs on return
products. With online purchases, you have the same rights as you
would if making phone or mail purchases, so it is imperative to keep
records of all communications with the seller.
If you have trouble with your debts, contact
the nonprofit Consumer Credit Counseling Service in your area to help
you budget and to negotiate a payment plan with your creditors. Call
1-800-777-7526 (777-PLAN) for a local listing.
It is easy sometimes to get caught up in yearly
holiday shopping excess. As the malls become congested, consider
alternative gifts. For example, a charitable contribution made in the
recipient's name can be an ideal gift that exemplifies the true
spirit of the holiday season. And don't forget that sometimes the
best gifts are homemade ones.
Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving only the consumer. We are a comprehensive source of unabashed advice about products and services, personal finance, health and nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers
